Payment Methods - New to importing

Ball63 · 04-11-09

Hi,

I am preparing to import my first shipment from China to Australia and have manged to negotiate for sample order worth just over $6k(US). Basically I am new to this and wish start up my import business.

I am filtering through all the paper work requirements and jargons and need some direction & clarity on the do's and dont's.

My supplier has issued the Proforma Invoice and all this time I thought I could just go to the bank and transfer 30% on order to the suppliers account.

Questions:
1. Am I right in assuming it is ok to just transfer the 30% now or do I have to go through some official process as I've just read on the internet?
2. Do I need some L/C document which I understand I will be needed upon arrival of my products.?
3. What other documentation must I have to comply with shipping and customs requirements or is this something the shipping agent should be doing for me?

Just curious to find out if there is a simple explanation of procedure somewhere on the net or if I could get some advice through this forum on the 'how to'?

I have a freight forwarder I am talking to, but not finding the rep very useful to date. Freight forwarder/shipping agent referrals would be welcomed.

Thanks

David.Pagotto · 04-11-09

Hello,
It is great to hear you are getting into the importing game, here are the answers to the questions you asked:

1. Am I right in assuming it is ok to just transfer the 30% now or do I have to go through some official process as I've just read on the internet?

Every supplier is different, some suppliers will require 30% upfront before production begins and the remaining %70 before the shipment of good, others may require %100 of the payment upfront which is not uncommon for small or sample orders. What is the arrangement you have with your supplier?

2. Do I need some L/C document which I understand I will be needed upon arrival of my products.?

Yes, but you will need a freight forwarder to arrange it for you. You just need to pass on to them the following documents:

1. Commercial Invoice
2. Packing List
3. Timber Declaration

These should be all organized by your supplier.

3. What other documentation must I have to comply with shipping and customs requirements or is this something the shipping agent should be doing for me?

Just the above three documents, get them off your supplier and pass them along to your freight forwarder.

Please also be aware that you will need to pay GST, Duties and a variety of other changes once your shipment arrives.

If you have any other questions please let me know.

Regards Dave

Ball63 · 04-11-09

Hi Dave,

Thanks for the reply, excellent information to clarify my understanding. All sounds a bit more simple if the 3 documents is all I need.

The arrangement is 30% on production and 70% on shipment.

I've been doing a bit of reading on various sites including customs website and just got a bit overwhelming with the explanation of procedures with things(terminology) such as bills of lading, clean payment, Incoterms, URC for collection, etc..

Just 2 more questions:
1. Because the shipment is small(approx 30 boxes) I've requested the freight forwarder for door to door service/quotation. Would this be the best way to get it to my premises? Or, is there any benefit in going and picking up the good from their premises with my own transport? (not sure if I am saving any money by doing this..!)

2. I am planning to sell online and the shopping cart software search is the next challenge. Any suggestion on a web hosting package or cart software.?

Once again thanks heaps for the quick response and I am glad I've found this forum which has a lot of fantastic information.

David.Pagotto · 04-11-09

Hello,

Before I forget your freight forwarder may also require the bill of lading on top of those three other documents I mentioned,

As for your questions:

1. It is much easier to get your merchandise delivered to your door, and is usually quite cheap. I would ask your freight forwarder for the cost, but it ultimately depends on how close you are to the port, what vehicle you have and so on to decide to pick it up or get it delivered.

2. As chance may have it I run a company which specializes in online store creation, if you are after something simple we could do something together for around $500, with hosting at $5 a month. If you are computer savvy you could do it yourself, the cart software itself is free (zencart) you just have to know how to set it all up.

Hope this helps, Dave

Ball63 · 05-11-09

Hi Dave,

Thanks for the info on shipping.

I guess to start up a simple shopping cart might be sufficient, however, I am assuming the package will be able to handle any future growth/expansion if required.

Thanks for the offer and it's good to know you have the expertise in this area also. I am tempted to have a go myself with shopping cart, however, I might be best to keep my focus on the business side of things. Let me get back to you on getting something up & running.

1. Would you have a template or sample sites you have setup that I could look at using Zencart as I am not familiar with it?
2. Also, I am assuming it comes all standard links to australia post for shipping and I will most likely use paypal for payment, however I see that I might need some kind of emerchant facility if I went down that track.
3. Would Zencart hook into Westpac or eWay, etc.?

On the hosting side of things, I am interested in this & just wondering what is included in this.

Thanks

David.Pagotto · 05-11-09

Hello,

If you have the time I would strongly suggest having a go yourself, do you understand basic php and css? If so then why not have a go? I use zencart, it is full of all the features you would want and more.

In responce to your questions:

1. I will PM you a few of the sites I have done.
2. Auspost and paypal are easily setup with zencart.
3. You can be paid via bank deposit through the zencart system so you can receive payments straight to your account. You can also set it up with eWay.

As for my hosting, if you use it sensibly it is unlimited space, bandwidth, emails and so on.

Ball63 · 11-11-09

A) It's electronic products and computer cables and the weight is around 450kg in about 48 boxes(1.5 CBM). FOB is Shenzhen.

Not sure if that's going to be cost effective to air freight but let me know if you can give me a quote.

B) If I was looking at another smaller sample shipment say around 15 kg, can you also tell me how much that might cost to Melbourne from Shenzhen(door to door). Product cost will be approx. $300US

C) Thanks for your feedback on shopping carts, I am still reviewing my best option and using buying a skin is something I am considering also.

Sprinkerz, could you tell me a bit more about your services and company? I am interested in your services which sounds attractive.
++++++++
PO
1) General Purchase order question??: When I send my PO to my supplier in China, form a tax/accounting & shipping point of view does it matter what currency I state on the PO. The quote is in US dollars, so do I just send a PO in US dollars or does it need to be converted to AU dollar??

Ball63 · 13-11-09

SprinklerZ , any response from you will be appreciated, re: your services, you should also have a PM from me.

anybody got answers regarding PO?

v1n · 18-11-09

Quote:

Originally Posted by sprinklerz

Hi ball63, sorry for the late reply. Workloads too high

due to end of the year. Below are some advice I could give.
---------------------------------------

I suggest that you approach several forwarder in china for quotes. Since your supplier is located in Shenzhen, air freight should be very affordable because SZ is just across Hong Kong. Courier company like UPS and DHL charges can be 10-20% lower than their branch in China and if you hire a forwarder that specialize in air freight, they enjoy very high discount from DHL and UPS and the discount is EXclusive from from the 10-20% lowered from China branch. You just need to find a good forwarder that offer fast air-con truck to ferry your goods from your supplier and straight to the shipping company.

I just did a check for you, you can have a look for reference:

Hong Kong UPS: 150 KG, delivery time 2-4 days, tracking number available, by volume weight. 4,978.68 CNY RMB conversion from xe.com 780 AUD

You are require to seperate them into 3 packages 150kg each.
You also need to make sure that your electronics does not contain flammable liquid/powder, batteries, shipping branded replica electronics are prohibited as well.

You could send declaration form for each packages or tell your forwarder the goods value and have them do it for you.
Is your supplier also acting as your forwarder? it is better to consult your supplier or their forwarder. Because if your supplier deals mostly with local retailers only, they might not be sure of this. If your supplier is in doubt, request for their forwarder contact and ask them directly.

Unfortunately, our company operate as a wholesale forwarder. Meaning, although we are able to provide low air courier service but we do require our customers to purchase their merchandise thru us. We offer service to source any type of goods found in China , Hong Kong and Taiwan.
I regret for not able to render any further service at this point.
You may visit our website at renevous.com should you require our service in the future

Hi,

I am very new to this importing business. I am wondering how much do we get tax to import goods from china/thailand? i am thinking to import clothes/accessories/shoes.

Ball63 · 23-11-09

I am new also, but I think it is generally 5 % for duty and 10% for GST. You should check with customs to confirm and be sure.